Upon occasion, we recieve a “contingent” offer on a listing. Most offers have contingencies, such as mortgage and inspection. But in Westchester and New York, a “contingent offer” is one where the buyer still needs to sell their own house (in nearby Fairfield County, CT it is known as a “Hubbard Clause”). Most of the time, our client wants nothing to do with waiting for another home to sell in order for them to sell their own. But what really makes the arrangement untenable is when the rest of the terms of the offer give us no reason to even consider the deal, even if the buyer’s home is quite salable. 

When negotiating, win/win works best. If something about your offer is less attractive, you have to compensate somehow by adding something that is attractive. In other words, if you want the seller to take their home off the market (and wait for your home to sell risking that it won’t and they’ll lose 60-90 days on market), you can’t expect them to embrace a low number. What’s in it for them? Why wouldn’t they just keep their home on the market and wait for a higher offer? 

Price and terms. Price and terms. Those are the magic words. Not just price, not just terms. They go hand in hand. Cash buyers know this, and that is why they leverage their strong terms with a lower price so often. They have leverage. On the other hand, if you are making a contingent offer, you have no leverage. None. Zero. Zip. Nada. Moreover, you are asking the seller for a huge favor, which is to share your own risk that your house might not sell. And yet we get some people who still make a low offer! Why would a seller do this? 

If a buyer truly believes that they can sell their own home and want to make a contingent offer to buy, they need to understand that their offer must be strong- very strong- to compensate for their contingency. It’s only logical. If you are going to make a contingent offer, and you want to be taken seriously, don’t lowball. A strong contingent offer just might be considered. And if you are making an offer on the home where you’ll want your loved ones to live, don’t you want your offer seriously considered?  

A recent post by Donna Harris got me to take this thought out of mothballs and share my view on a phenomenon I am witnessing out there in the market. We’ve heard of a “shadow inventory” of foreclosed homes that aren’t yet on the market. They are there, but they aren’t potential business until they get listed. 

Well, I think there is another “shadow inventory,” and it is on the side of the buyers. I’ll explain. As a listing agent, I monitor the number of showings each of my listings get. Some have has 20, 30 or even 40 showings and haven’t sold yet. So what did the 30 people who walked through end up buying? 

In most cases, nothing. There weren’t 30 other sales in that locale or price category. 25 of those 30 parties who walked through never bought anything. If they did, the market would have taken off. It didn’t. I would opine that more than half of the people out there looking won’t buy now or in the foreseeable future for a variety of reasons. 

• They still have to sell their current home.
• They haven’t been to the bank yet & won’t get approved.
• They are nervous about committing to a purchase in this environment.
• Their “plan,” such as an inheritance or parental gift won’t pan out. 
• They like to look at houses.

Many of the agents working with these people are so desperate for business that they feel that working with a warm body beats sitting at home. And they hope that the buyer will find something so spectacular and wonderful that they’ll finally commit, go to the bank, or get off their rear end and buy. But they seldom do. Like the shadow inventory of homes, these people are “there,” but they aren’t business. They are busy work. 

In the meantime, we’ll still have 10, 20, and 30 showings that don’t buy- this house, or any house, while the agents accompanying those people spin their wheels and hope for a miracle. It isn’t a good business plan, but it is a reality. 

Last week I wrote a blog post asking if the local media and politicians overdid the warnings about Tropical Storm Irene. My concern was that, in light of the area being relatively spared, future warnings might not be taken as seriously. It turns out that the answer to my question would be “no,” as in they didn’t overdo it. Much as I disliked the schoolgirl-like giddiness of some of the weather reporters (which is a trend that will probably never go away), the aftermath of the storm has revealed enormous damage right here in our own back yard. 

• President Obama was just in Paterson, New Jersey, less than an hour from me, because the flooding was so severe. 
• Power outages in Westchester were significant, and some were without electricity for days. 
• Westchester also had plenty of flooding, including a a home that is under contract with some clients of ours. The basement was so flooded that the laundry appliances were floating. 
• The flooding wasn’t just in basements. Last Sunday I published photos of standing water in Thornwood, NY which turned a main road into a lake, and a garage that was almost washed away by a brook that overflowed. 
• Tannersville, New York in the nearby Catskills had its downtown literally washed out. The main street was a river. 

Our Westchester Active Rain meetup is tonight at 7pm at the Brazen Fox in White Plains NY. All are welcome! 

The address is 175 Mamaroneck Avenue, White Plains, NY 10601. Parking is best behind the building in the municipal lot on the corner of Maple and Waller. Brazen Fox does have a rear entrance from the lot. They use a muni meter, in case you are keeping score. 

I have about 8 confirmations so it should be a fun time, and it will be nice to meet in person and break bread as we gear up toward autumn. 

Feel free to ask questions in the comments or email me at jphilip@jphilip.com. If you want, give me a call on my mobile, 914-450-8883. 

As I enter my 45th autumn, I sometimes ponder what life has taught me through this journey. I bite my tongue more than I did 20 years ago when tempted to make a wisecrack. I ask myself what my father would do more often. And, with fatherhood, I thank God for the safe return of my children from school and camp every day. 

I recall hating to be behind a school bus in the morning. It slowed me down, got in my way, and caused me to be late. It was a nuisance. But now that I put my 4 children on school bus, I am far more patient. And if I am late, it is my fault for not planning better. But years ago, while I’d never pass a bus or do anything stupid around one, I did impatiently pump the gas once the bus turned away. And thankfully, I never hurt myself or another in my immaturity. 

So now that I am a dad, I have a request for everyone out there with the start of school arriving in our area this week. School is open. Please please please drive carefully. Those are my babies on those buses, and I want them home safe tomorrow and every day afterward. If you have kids, you know what I mean. If you don’t, please trust me on this one. Children get on and off buses, cross the street, and assume they’ll live forever. They trust that cars see them. They are wrong. But don’t let them pay for that mistake with their life- be alert enough for both yourself and them. Please be careful. Please be patient. 

Again, please drive safely, very safely, because nobody I know has a child to spare. We need them all. 

Anyone who knows me knows that I love the Hudson River towns, and not just the ones in Westchester. Nyack in Rockland is near and dear to my heart, and so is Cold Spring, a hop skip and a jump away in Putnam County, NY directly across the Hudson from West Point. 

The area is very popular with weekenders from Manhattan, and aside from the village of Cold Spring, which has one of the most charming downtowns you’ll ever see, there is also the village of Nelsonville, and the larger areas  outside the villages in the town of Philipstown. All share the Cold Spring post office, and all are served by the Haldane school distict. There is something here for everyone here from historic, quaint village living, to bucolic acreage with privacy and majesty up the mountainside. 

The market here is more like Westchester than Putnam or nearby Dutchess county. In the 90 days spanning June through August, the area had 10 closed single family home sales at a median sale price of $407,500, which is almost $100,000 higher than the $315,000 median price in the rest of Putnam. In the same period last year when the stimulus was still skewing price and volume upward, 10 homes sold at a median price of $481,000. This is a significant drop in median price, but 2010 was affected by the $8,000 tax credit. There are two homes under contract at a median price of $457,500. 65 homes are on the market at a median list price of $499,900. 

The high inventory points to now being an exceptional time to be a buyer in the Cold Spring area. There is some real opportunity here. We currently have a beautiful listing in the town outside the village on 8 acres with a pond for $549,900. It is an all-brick, 2400 square foot 4 bedroom 2.5 bath ranch with a 2-car garage and 2 patios. That is an incredible value for a locale that is just over an hour from New York City on the Hudson Line. The area is one of the little jewels that deserves far more attention. 

If you’d like more information on the property, call or email me. If you’d like to search for Cold Spring area homes like an agent, get yourself a free Listingbook account. 

This is the market report for Ossining, NY for August 2011. It covers single family homes in the Ossining School District. All data is from the Empire Acess MLS. 

In August 2011, Ossining had 15 closings at a median sale price of $420,000.

In August 2010, Ossining had 15 closings at a median sale price of $436,000.

Both volume and price are holding steady, and this is a fairly siginificant departure from the downward trend of previous periods this year. August of 2010 was in the the stimulus period, so the results this August, which are unaffected by any outside forces or inducements, are organic and describe some strength. That is good news for sellers, finally. 

Currently, there are 33 homes under contract at a median asking price of $409,222. This shows that pending prices are are also strong, and we should expect volume to remain steady as the autumn approaches.  

There are 132 active listings at a median asking price of $424,611. We are actually down to under a year’s worth of inventory at this rate, and while buyers do have lots of choices, sellers have gained some ground. It remains a buyer’s market, but not as severe as it was earlier this year.

Since inventory is down & prices and volume are stronger it suggests that we may have turned the corner. 

Previous posts on Ossining are here. 

Search Ossining homes like an agent with a free Listingbook account. 

I got a call today regarding one of my listings from the lender on the property. The person was in the collections department, and it was one of those calls lenders sometimes make on a distress property. However, I think somewhere someone lost the memo that common sense would be a good idea, as I journeyed into bizarro bank land with this rube. 

After informing me that this was an attempt to collect and debt and all information collected would be used for that purpose, I reminded her that I was the broker, not the debtor. She was undeterred. She then asked me what the address was of the property, and I told her she gave me the address when I first answered the phone.  She was clearly following a script. She asked me to fax the listing agreement, which was hilarious- it had been faxed so many times I had them on speed dial. When I asked to whose attention it should be faxed, she said just fax it, it will get here. That went back and forth a few times too, but I finally got from her that the account number would go on the cover letter. Again. 

Then we really went into orbit. She wasked me at what number I could be reached. I reminded her that she had just called me. She again asked for the number. I said “the number you just called.” No, she needed a number. 

We went around in circles, on half a dozen other details that were either self evident or information already volunteered by this person. What made it so peculiar was the arrogant attitude. SHE was the bank. SHE was the boss. This is a switchboard grunt, clearly, a low level collector at best, and not a negotiator. 

This is the caliber of person dealing with the public at the big box bank. If she worked at a restaurant or office she’d have been sacked her first day if she conducted herself like this. Anywhere else (like for example, J. Philip Real Estate), such obtuse, arrogant robotic ineptitude would never be tolerated. We have MBAs out of work while this one collects a check for…what?  Something is wrong with this picture. Is it too much to ask that the people reaching out to the public from the banks at least know how to deal with the public? 

If you haven’t heard of LuAnn Lavine, I’ll tell you why she matters. She was mentioned by Maureen Dowd in her last NY Times column, and has one of the most emailed stories on industry news site Inman News. Last week, Ms Lavine, a real estate broker, got up at a town hall meeting and told President Obama how rough it is out there in the housing market. When he gave a rather vanilla, political answer, she challenged him, respectfully, but told him that short sales and loan modifications were a disaster and that lenders wanted perfection, which seldom occurs in humanity. She spoke her mind. 

I have often thought of what I’d like to say to the President if I had a chance to break bread with him. Here is what I’d tell him:

You will not fix the economy, Mr President, until you fix housing. Fix housing, and the economy will follow organically. 

The facts on the ground clearly tell me that the housing market remains broken. 
The facts on the ground clearly tell me that the current policy, or lack of a policy, do not work.

The proposed “fixes” by lawmakers make me wonder if they have a clue. The chatter about raising downpayments, lowering conforming loan limits, eradicating the mortgage interest deduction, and other blows to the backbone of housing, which were never causes of the economic downturn to begin with, perplex me. I wonder if lawmakers reside in the same world as I do.

But what do I know? I’m just a real estate broker.

Four years after the sub prime crisis, the government got around to suing the big box banks this week. Their stocks will suffer, and pension funds will drop yet again. This is not the fix. I want a the task force. I want a summit. Nothing symbolic. I want people in whom I have confidence, whose pedigree is results, not politics. I want a housing NASA, which will do what is hard, and do it well. I want an authoritative answer to an earnest real estate broker’s simple question.

This is not a chicken or the egg thing. Employment, consumer spending, and commerce all flow from a healthy housing market. People will not feel confident in their job or see retail business pick up in a vacuum while housing remains stagnant. Fix housing. Think about it when you are in the shower. Talk about it. Take back the dialog from the congressional pablum purveyors and let us know you care. Give us some passion for pete’s sake. Get mad, dammit. 

The president needs to immediately get moving on housing, as JFK would say, with vigor. I want to wake up in the morning and go to bed each night knowing that the president is standing up to the housing challenge the way I knew Reagan and JFK stood up to the Soviets. It’s time to wake up from this 4 year old case of amnesia and pick up the ball again. I’m sick of China this and recession that.

We are better than this. Much, much better.  And I want the Chief Executive to carry himself that way. Let’s go forward, from this time and place, like the resourceful, productive, tail-kicking society we are and say that September 2, 2011 was when housing started its turnaround. We can do this. We can do anything. 

“Until one is committed, there is hesitancy, the chance to draw back, always ineffectiveness. Concerning all acts of initiative (and creation), there is one elementary truth the ignorance of which kills countless ideas and splendid plans: that the moment one definitely commits oneself, then providence moves too. A whole stream of events issues from the decision, raising in one’s favor all manner of unforeseen incidents, meetings and material assistance, which no man could have dreamt would have come his way. I learned a deep respect for one of Goethe’s couplets:

‘Whatever you can do or dream you can, begin it.
Boldness has genius, power and magic in it!’ “

-WH Murray

I had the good fortune to be asked  by the Ossining-Croton Patch.com site to blog for them regularly, and this past week I was featured in one of their videos on the challenges of the housing market. We met at one of my firm’s listings in Ossining, and filmed interview style on the state of the market, what sellers can do to get their homes sold, and where I saw the market going. 

If you want to see me in a talkie and hear my nasal, best suited to be writing voice, feel free to click on the link. My editor said we would be doing it again, but maybe he was just being nice. I was proud that I refrained from drooling. Articulate talk will be in the ear of the beholder. 

By the way, the house we are filmed at is Tom Ricapito’s listing at 14 Hillcrest Ave in Ossining, a really great 4 bedroom 2 bath starter home with a 2-car garage that is only $349,900. It is 2100 square feet, a great rear patio and landscaping, and even has a bar in the basement. And yes, it has a waterfall in the back yard. Call Tom at (914) 804-3048 if you’d like to see the place.